NPD: Apple falls to Droid - Verizon catching up with AT&T

by Steve Ragan - May 10 2010, 17:15

The NPD Group has said that based on unit sales last quarter; Android-based Smartphones outsold the competition, pushing the iPhone’s market share down to third place. At the same time, Verizon moved to just two points behind AT&T, thanks in part to strong sales of their Android-based line of devices.

The report itself is the result of a consumer study during Q1 2010 that included 450,000 customers.

The new quarterly figures leave RIM in the top spot, with Blackberry devices accounting for 36 percent of the Smartphone market, while Android-based devices trailed by just eight points, holding the second position with 28 percent of the Smartphone market. Apple’s iPhone, with 21 percent market share, moved down to third place, but its still a force to be reckoned with, given the high hopes for the newest release expected soon.

NPD says that carrier distribution and promotion have played a crucial role in determining Smartphone market share. Yet, according to Ross Rubin, executive director of industry analysis for NPD, while “carriers continue to offer attractive pricing for devices” they need to “present other data-plan options to attract more customers in the future.”

The NPD report also noted that Verizon is moving closer to AT&T in overall market share with “strong sales” of their Droid and Eris handsets on the Android front, and Blackberry Curve, supporting RIM. AT&T held a third of the Smartphone market with 32 percent, while Verizon trailed them by just two points with 30 percent.

So is Verizon offering the buy-one-get-one deals on their Smartphones just to increase sales and market share? Business-wise, yes, and AT&T does this too. Yet, for Verizon, the wide range of devices offered is part of a much larger plan.

“When customers look at purchasing a device there are many factors that they consider, and that is why we have a broad range of offerings,” said Michelle Gilbert, Verizon Wireless Public Relations Manager in Indiana.

“We feel it is more about the network experience, and getting the customer on the device that best supports their individual needs.”

For the most part, Gilbert explained, a lot of Smartphones have similar abilities, much like automobiles. No matter the type of car you buy, it’s going to drive you from point A to point B. Likewise, with Smartphones, a consumer will get Web and Email, traditional voice calls, and the ability to download applications.

The sticking point is the network. “If you don’t have a strong network, then as a user you’ll end up very frustrated,” Gilbert added.

The final note from NPD deals with overall pricing. According to the report, the average selling price for all mobile phones in Q1 reached $88, which is a 5 percent increase from Q1 2009. Smartphone unit prices, by comparison, averaged $151 in Q1 2010, which is a 3 percent decrease over the previous year.

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